International Journals Call for paper http://www.iiste.org/Journals/

1. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol 4, No.15, 2012
An Empirical Investigation into the Performance Management Practices
of Selected Manufacturing Firms in Southern Nigeria
Oge Mounanu, Ph.D, MNIM
Department Of Business Management
Godfrey Okoye University
Ugwu-Omu Nike Enugu
Email: dozie_monanu@yahoo.com
Nicholas N. Igwe, Ph.D, JP, MNIM, MIMC
Department Of Business Management
Godfrey Okoye University
Ugwu-Omu Nike Enugu
Email: ngozinick@yahoo.com
J. U. J. Onwumere, Ph.D, FCISN (Corresponding Author)
Department of Banking and Finance
University of Nigeria
Enugu Campus
Email: josaphatonwumere@yahoo.com
Abstract
This paper seeks to assess whether current performance management practices yield effective results and compare
performance management practices in Nigerian firms to best practices. Data were collected from nine hundred and ninety
three (993) manufacturing firms in Nigeria. The Yamane’s statistical formula was employed for sample size determination.
285 copies of questionnaire were distributed to various managing directors of these firms who were strategically placed to
provide data for a proper evaluation of performance management practices of the sampled organizations. Using frequency
tables, Chi- square (X) statistic and Z-test one sample Kolmognov-Smirmov test, the study reveals that current performance
management practices in Nigeria delivers effective results, but did not conform to best practices. Based on the findings, the
paper submits that leaders and top management of these manufacturing firms should continue to apply performance
management strategies including training and development programmes in a positive manner in order to enhance
productivity amongst employees.
Keywords: Empirical Investigation, Performance Management, Manufacturing Firms.
1.0 Introduction
1.1 Background of the Study
Organizations are defined as collections of people joining together in some formal association in order to achieve group or
individual objectives. At least one set of objectives, for any organization will relate to the production and output of specified
goods and services to individuals, groups and other organizations (Dawson, 1992: xviii). Individuals are engaged by
organizations with the hope that they will contribute to fill the felt needs of the society. There is therefore the need for an
established mechanism for ascertaining whether the organization and individuals are doing well in their own part of the
bargain. A change in perception from employment to performance has been recorded (Torrington et al 2005: 224). Concern
for performance is emphasized because both parties have a stake in performance thus calling for the need to develop
integrated schemes.
Ewurum (2006:1) states that performance occupies a strategic place in the organizational scheme of things, insisting that
both sides of the internal and external environment have a stake in performance for obvious reasons. Effective performance
management benefits the individual, organization and the economy through increased efficiency, effectiveness and
productive aggregates in terms of quality goods and services (Mullins, 2010).
Poor quality performance at organizational, social, economic, individual and governmental levels has been the bane of the
Nigeria nation. Manufacturing firms are not performing optimally in Nigeria thereby prompting Ifedi (1994:12) to observe:
that there is little doubt that manufacturers in this country have since been endangered.
43

2. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol 4, No.15, 2012
1.2 Statement of the Problem
The manufacturing sector in the Southern Nigeria has been in turmoil. The environment for manufacturing operations has
remained turbulent and dynamic because of high operating costs, epileptic power supply, inadequate backward linkages and
lack of exposure to best management practices just to mention a few. This development is even accentuated by under-
funding of the Bank of Industry (BOI) which originally gave loans to the sector. The greatest headache of the sector is
electric power supply which was down by 90 percent in 2009 (The Guardian 2009). Also exchange rate fluctuations and
unpredictability contribute to make importation of needed inputs difficult to achieve and sustain operational capacity. Even
the manufacturing firms seem not to help matters. There are issues of measuring performance of these firms using defined
criteria and that of the employees. Lack of a single universally acceptable performance appraisal applied by these firms is a
problem itself.
1.3 Objectives of the Study
The objectives which this paper seeks to investigate are as follows:
i. To ascertain whether current performance management practices in Southern Nigerian Manufacturing Firms yield
effective result
ii. To assess the performance management practices in these firms against best practices.
1.4 Research Questions
From the foregoing, the following research questions could be discerned.
i. To what extent do current performance management practices in Nigerian manufacturing firms yield effective
results?
ii. To what extent do performance management practices in Nigeria manufacturing firms conform to best practices in
organization in Southern Nigeria?
1.5 Statistical Hypotheses
In view of the above research questions, the following hypotheses were formulated to guide the study:
i. Current performance management practices in Nigeria manufacturing firms deliver effective results.
ii. Performance management practices in Nigeria manufacturing firms conform to best practices.
2.0 Theoretical Underpinning and Review of Related Literature
The process of management involves making a continuous judgment on the skills, behaviours, activities and contributions
of staff. It is imperative that members of the organization know exactly what is expected of them and how their performance
will be measured. Mullins (2010:510) states that performance management is a process which brings together many aspects
of people management. It is about performance improvement at individual, team, department and organizational levels. It is
also about staff development as a means to both improve and enhance performance, and as a means of managing behaviour
and attitudes. From the foregoing it follows that if there are good working relationship individuals and teams are more likely
to perform well together than if no good relationships prevail. Fowler (1990) reacts that performance management is about
managing the organization. It is a natural process of management, not a system or a technique. Performance management is
about managing within the context of the business (its internal and external environment). Contributing, Lawson (1995)
opines that performance management is basically concerned with performance improvement in order to achieve
organizational team and individual effectiveness. Organizations according to him have “to get the right things done
successfully”. It is equally important to state that performance management is concerned with employee development. This
is because improvement is not achieved unless there are effective processes of continuous development. This analogy
addresses the core competences of the organization and the capabilities of the individuals and teams. Performance
management should really be called performance and development management (Armstrong, 2005). The Chartered Institute
of Personnel Developments (C.I.P.D, 2008) suggests that performance management is about establishing a culture in which
individuals and groups take responsibility for the continuous improvement of business process and their own skills,
behaviours and contributions. From the above definitions it is note worthy to underpin that performance management
concerns everyone in the organization not just managers. This study rejects the cultural assumptions that only managers are
accountable for the performance of their teams and replaces it with the belief that responsibility is shared between managers
and team members.
Current Issues of Performance Management in Organizations
Most of current issues of performance management in organizations have been driven by developments in the industrially
advanced countries (Olaye 2005:1). Recently, performance management practices survey has taken the front burner in the
advanced economies of the world. Nnabuko (2007:2) believes that performance relates to how well a product performs or
44

3. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol 4, No.15, 2012
how well a service is provided.
According to Adeleye and Yusuf (2006:94) competitive pressures differ across companies and they influence the relative
emphasis that companies place on competitive objectives such as cost, quality, speed and flexibility. Nevertheless, the
pursuit of goals of best practice demands excellence in all competitive fronts as a means of improving on business
performance outcomes.
With the best practice today, 51% of organizations frequently trained their managers in applying performance management
systems, while 22% of the sampled organizations always use competencies in their performance systems. They establish job
competencies or core competencies in order to clarify what is expected of employees and to link different systems. As a
matter of fact, 20% of the current sample of organizations includes team-based objectives in individual performance plans.
There is team appraisal in which team members or peer actually set goals and appraised one another. Approximately, 20%-
25% of the organizations in this survey use peer input, customer feedback and input from direct reports. All these new
ideas/measures help to boost productivity level in manufacturing organizations in Southern Nigeria (Adeleye and Yusuf,
2006:174).
3.0 Methodology
The survey research method was utilized in line with the problems and objectives of the study. The ex-post facto research
design was also employed. Thus data were collected from both primary and secondary sources. A set of questionnaire
containing thirty (30) questions was drawn in connection with the issues raised in the study. The sample frame consists of
manufacturing firms in Southern Nigerian States made up of Abia, Akwa-Ibom, Anambra, Cross-River, Delta, Edo, Lagos,
Ogun, Osun, Oyo and River State. It was made up of nine hundred and ninety three (993) manufacturing organizations
contained in Gold Star Directory (2008) for the major 5000 companies in Nigeria. The questionnaire was administered to
the various managing directors of these firms who were strategically placed to provide data for a proper evaluation of
performance management practices of the sampled organizations.
Yamane (1964) formula was utilized for computation of the sample size (see appendix I). After calculating the sample
proportionately to the various states depending on the proportion of the entire population that came from each state using
Kumar (1976) proportional allocation formula (appendix II). The questions were optioned using a five (5) point Likert type
of responses namely: Strongly Agree, Agree, Neutral, Disagree and Strongly Disagree. In all, 280 respondents returned their
copies duly completed from a total of 285. A combination of Chi- Square and one sample Kolmognov-Smirmov Z test
hypotheses was adopted for analysis. These techniques were considered appropriate because the samples of the variables
were randomly selected from the population.
4.0 Results and Discussion
In this paper, the performance management practices of selected manufacturing firms in Southern Nigeria were investigated.
In this section, the findings in relation to the objectives of the study are presented and discussed:
i. The extent current performance management practices in Nigeria yield effective results.
The finding of this objective reveals that current performance management practices in selected manufacturing firms in
Southern Nigeria yield effective results. This result agrees with Mc Namara, (2007: 4) and Mullins (2010) who in their
individual writings see performance management as setting goals, monitoring the achievement of these goal, sharing
feedback, evaluating, performance and rewards for employees performance in the organizations. It is note worthy that many
of the sampled firms agreed to the adoption of competent skill rating. This equally gives credence that the manufacturing
firms are aware of innovations in performance management system. The table 1.0 below gives more insight.
ii. The extent performance management practices in Nigeria manufacturing firms conform to best practices.
The findings of this objective reveal that manufacturing firms performance management practices did not conform to global
best practices. Table 2.0 (see, appendix) on performance management conformity with best practices attest to this assertion
and the finding here agrees with the writings of Miller (1990), Elany (2001) and Adair (2005) who individually argue that
performance management practices in organization should be tailored by organizational leaders to be in random with global
practices. For organizations to achieve the dimensions of service delivery, price and quality are very essential. However,
this study reveals that manufacturing firms in Nigeria seems to place concern more on price as against service delivery
which is the global practice.
45

4. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol 4, No.15, 2012
Testing Hypothesis One
Test Statistics
Performance Management Practice and Effectiveness Results
Chi- Square (a) df 47.825
Asymp. Sig. 4
.000
a 0 cells (.0%) have expected frequencies less than 5. The minimum expected cell frequency is 57.0.
Decision rule: The rule is consistent with that in hypothesis two. Hence, testing the above hypothesis at 95% confidence
interval and 4 degree of freedom, the computed chi- square value of 47.825 emerged. The result is far greater than the
critical chi- square value of 9.488. This means that null hypothesis is again rejected. The study thus concludes that: Current
performance management practices in Nigeria significantly deliver effective results.
Testing Hypothesis Two
Performance management practices in Nigerian manufacturing organization do not conform with best practice.
Hypothesis two was tested using the Z- test one- sample Kolmogorov- Smirnov test of normal distribution. Employing the
Statistical Package for Social Sciences (SPSS) analysis, the result below emerged:
One- Sample Kolmogorov- Smirnov Test
Performance management conformity with best practice
N 285
Normal Parameters (a, b) Mean 1.7930
Std. Deviation .92460
Most Extreme Difference Absolute .289
Positive .289
Negative -.196
Kolmogorov- Smirnov Z 4.872
Asymp. Sig (2- tailed) .000
a Test distribution is Normal.
b Calculated from data.
Since KS-Z is 4.872, which is greater than 1, the distribution of the responses is normal. This means that any conclusion
drawn from the frequency distribution is accurate as most of the responses tend towards the mean (1.7930). with a higher
percentage of the respondents (87.78%) disagreeing that performance management practices in Nigerian manufacturing
organizations conform with best practices, the null hypothesis should be accepted. Thus performance management practices
in Nigerian manufacturing organizations do not conform to best practices at the moment.
5.0 Conclusion and Recommendations
Having, carried out this study and analyzed the data obtained from the field, there is no doubt that performance management
practices in Southern Nigeria firms yield effective result. The study also revealed that performance management practices as
currently carried out by these firms did not conform to global practices. The following recommendations are hereby
suggested by the researchers;
i. Leaders and top management of these manufacturing firms should continue to apply performance management
strategies in a positive manner bearing in mind its usefulness to enhance level of productivity performance among
their employees.
ii. Since performance management practices in these firms did not conform to best practices, training and
development programmes should be encouraged by professional institutes such as Nigerian Institute of
Management (NIM), Chartered Institute of Personnel Management (CIPM) to enhance the proficiency of members
who are employees of these firms.
iii. Government at all levels should continue to create the enabling environment for these manufacturing firms to
thrive and survive bearing in mind that the operating environment is still not very conducive.
46

5. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol 4, No.15, 2012
Appendix
Table 1.0: Performance Management Practices and Effectiveness Results.
Category Frequency Percentage
Strongly Agree 78 27.48
Agree 73 25.56
Undecided 14 4.81
Disagree 51 18.00
Strongly Disagree 69 24.15
Total 285 100
Source: Field Survey 2010
Employing Chi- Square statistics, the test result below shows that descriptive statistics,
N Mean Std. Deviation Minimum Maximum
Performance Management Practice 285 3.1404 1.57711 1.00 5.00
And Effectiveness Results
Chi- Square Test Frequencies Performance Management Practice and Effectiveness Results
Category Observed N Expected N Residual
Strongly Agree 69 57.0 12.0
Agree 51 57.0 -6.0
Undecided 14 57.0 -43.0
Disagree 73 57.0 16.0
Strongly Disagree 78 57.0 21.0
Total 285
Table 2.0 Performance Management Conformity with best Practice
Category Frequency Percentage
Strongly Agree 7 2.44
Agree 14 4.81
Undecided 14 4.96
Disagree 128 44.74
Strongly Disagree 123 43.04
Total 285 100
Source: Field Survey 2010
47

6. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol 4, No.15, 2012
References
Adair, I (2005) “Developing Tomorrow’s leaders” in CBI the path to leadership: developing a sustainable model within
organizations, New York: Caspian Publishing.
Adeleye, E.O and Yusuf, M (2006) “Towards Agile manufacturing: models of competition and performance outcomes”
U.K International Journal of Agile systems and management vol. 1 No. 1
Armstrong, M (2005) A handbook of human resource management practice. London: Kogan page publishers. CIPD, (2008)
Human Capital: Factsheet, November.
Dawson, S (1992) Analyzing organizations, London: Macmillan Education Limited.
Delany, K (2001) ‘Futurising Human Resources: How to achieve sustainability’ IBIS best practice business improvements
supplement.
Ewurum, U J F (2006) “Going the extra- mile in the work place to achieve peak performance:a focus on the university
system” in Nwosu, I E. and Ene,O. C Eds) Managing job ethics and Productivity in Nigerian Universities. Enugu: Institute
for development studies.
Ewurum, U.J.F (2006) “Management of performance and rewards in an organization” being a paper presented at the 2006
3rd quarterly summit of the institute of corporate administration of Nigeria held at the MODOTEL Hotel Enugu on Friday
6th October.
Fowler, A (1990) “Performance management: the MBO of the 90’s Personnel management,July.
Ifedi, C. (1994) “The manufacturing industry in Nigeria” in Business Concord, Tuesday March 29
Kumar, R.S.(1976) A manual of sampling techniques, London: Heinemann Limited.
Lawson, P. (1995) “Performance Management: an overview” in the performance management handbook, M.
Walters (ed.) London: IPD
Miller, D (1990) The karus paradox: How excellent companies bring about their own downfall, New York: Harper
Business.
Mullins, L.J (2010) Management and organizational behavior, England: Pearson Education Limited
Nnabuko, J.O (2007) “Managing performance” Enugu (a paper presented at a workshop organized by Nigerian Institute of
Management (chartered) for members on Mandatory Continuing Professional Education Programme (MCPEP) 3rd – 8th
March.
Olaye, S (2005) Delta collection strategy covering small units (country practice Nigeria) Expert Group meeting on
industrial statistics, New York: Department of Economics and Social Affairs statistics, United Nations.
The Guardian Newspaper, (2009) “The Exodus of firms, Nigeria’s Helplessness” October 29, p.16
Torrington, D., Hall, L., Taylor, S. (2005) Human Resource Management, Edinburgh Gate: Pearson Education
Limited
Yamane, T (1964) Statistics: An Introductory Analysis, London: Harper and Row.
48

7. This academic article was published by The International Institute for Science,
Technology and Education (IISTE). The IISTE is a pioneer in the Open Access
Publishing service based in the U.S. and Europe. The aim of the institute is
Accelerating Global Knowledge Sharing.
More information about the publisher can be found in the IISTE’s homepage:
http://www.iiste.org
CALL FOR PAPERS
The IISTE is currently hosting more than 30 peer-reviewed academic journals and
collaborating with academic institutions around the world. There’s no deadline for
submission. Prospective authors of IISTE journals can find the submission
instruction on the following page: http://www.iiste.org/Journals/
The IISTE editorial team promises to the review and publish all the qualified
submissions in a fast manner. All the journals articles are available online to the
readers all over the world without financial, legal, or technical barriers other than
those inseparable from gaining access to the internet itself. Printed version of the
journals is also available upon request of readers and authors.
IISTE Knowledge Sharing Partners
EBSCO, Index Copernicus, Ulrich's Periodicals Directory, JournalTOCS, PKP Open
Archives Harvester, Bielefeld Academic Search Engine, Elektronische
Zeitschriftenbibliothek EZB, Open J-Gate, OCLC WorldCat, Universe Digtial
Library , NewJour, Google Scholar